Online Gambling, William Hill Play for Playtech

Bet365 Industry LeaderThe British gambling operator and book maker, William Hill has shown its intention to exercise the call option in order to purchase Playtech’s 29% shares in the online venture, William Hill Online in order to seize total control on the joint venture.

It is expected that the bookmaker will pay approximately 424 million pounds in order to make that purchase. This joint venture opened its doors in 2008 as a partnership between William Hill and Playtech Ltd, the software developer, with Playtech holding a 29% stake in the business.

All of this started last November as William Hill started to formally evaluate the 29% shares of Playtech in WHO. William Hill has revealed that the evaluation process is now over. This was revealed as William Hill has made an official proposal to buy out Playtech’s shares. This proposed price represents a multiple of 9.3 times the earnings before counting depreciation, amortization, tax and interest of WHO in 2012.

In order for William Hill to raise the needed funds to make such acquisition, it is going to issue 2 ordinary shares for every 9 in existence, the purchase price will be equal £2.45 which will bring approximately  £375 million. William Hill is also going to exercise a bridge credit facility that is worth fifty million pounds.

William Hill is planning to acquire Playtech’s share so it can have total control on the joint venture because of its great success as the online venture has succeeded in consistently delivering positive revenue since it was founded in 2008. This was mentioned by the Chief Executive officer of William Hill, Ralph Topping. He also said that due to the success, it is clear that acquiring the 29% shares of Playtech is in the best interest of the shareholders and this is why William Hill is going to exercise the call option. He also mentioned that they are very glad that the shareholders are supporting them in the acquisition and the rights issue. He added that the company believes that the rights issue is the best way to fund the proposal for the acquisition. This is because it will leave William Hill with the needed capital structure while keeping the trading conditions and the potential for future developments in mind.

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